I received an e-mail on Monday from a friend of mine from College that has been seeking answers to a question I hear so often: “Is now the right time to buy?”.
It can be confusing when deciding if you should buy or rent. I took the bulk of my e-mail and have included it in this post. It is clearly optimistic, but it also carries an important message. I hope you enjoy.
The important thing to consider is how much your lifestyle will change. Can you afford the new payment? Do you think you can handle the responsibility of owning a home? If so, here is my opinion on buying vs. renting (even in this unprecedented time):1. Ending November 31st is a $8,000 tax credit for first time home buyers. (you guys would qualify and could use the $8k immediately).
2. You would have no other cost associated with the purchase as I can negotiate the closing costs to be paid by the seller. The closer we get to a recovery, the less likely this will happen. It is still a buyers market right now, but the paradigm is slowly shifting back to a neutral market. By the first part of next year who knows where we will be.
3. We are still at record low interest rates and as the economy improves, rates will have to go up to help pull some of the money out of our economic system.
4. The government rewards us for having our own home and you may be able to use some of those tax deductions to lower your tax base on a annual basis. (I would recommend speaking with your CPA)
5. Ending in November is the popular FHA program allowing borrowers to use the 3.5% down payment (this may be what your friends were referring too). This may drastically change how we purchase after its expiration. Lenders are more strict with condominium purchases
6. My last point is that there is a sense of pride when purchasing a home. You take interest in how it is decorated, what you do to upgrade it and ultimately how it will be looked at when you decide to sell it. The “pride” of home ownership is very real and rewarding.
When it’s convenient, let’s take a few minutes to discuss further.
I hope you found this useful. Thank you for taking the time to review this post.
For any questions please e-mail me at firstname.lastname@example.org